2 December 2011

"Money talks and bullshit walks" goes the saying. Sir Frank Williams is quoted by BBC as having said "Pastor has proven he is not only quick but can also maintain a consistent and strong race pace..." Fair enough, some may say. However, it would have been interesting indeed to hear Williams' opinion regarding Maldonado had he not come to his team with a multimillion pound sponsorship deal from PDVSA. More interesting still would be to see whether Williams keeps Maldonado, in the event that sponsorship money from PDVSA suddenly dries. That's what we were expecting, following investigation into the deal, and questioning from Venezuelan Congressman Carlos Ramos. Alas is not going to happen. Por ahora...

In recent communication Congressman Ramos told me that he wasn't going to reply to Claire Williams' email, in which she claimed that all Williams deals with its partners were subject to confidentiality clauses that prevented from commenting in public about them, and therefore no copy of contract will be sent to Congressman Ramos, and no information about payments disbursed to date by PDVSA will be shared. Ms Williams' preposterous argument could have been easily tackled by Congressman Ramos. In fact, while jointly preparing the reply to Williams that will never be sent, Congressman Ramos mentioned articles 154, 222, 223 and 314 of Venezuela's Constitution, which invalidates any claim to confidentiality argued by Williams. Simply put, any contract entered into by PDVSA is subject to approval, first by its board, and then by Congress. The reason being, PDVSA is fully owned by the Venezuelan State, and its budget needs to be approved by its board and by its sole shareholder. PDVSA can not agree to confidentiality clauses. Period.

But someone must have called Congressman Ramos. Or worse, perhaps someone threatened him, or his family. Just after Sunday's Brazilian Grand Prix in Sao Paulo, I communicated with Congressman Ramos to ask when would he sign and send me reply letter for Williams. And this is what he said:

I can't be seen as an anti-sport Congressman... The fight is against corruption, I can't make it personal against Pastor... Chavistas are manipulating this... I am frontal against corruption but we need public support for this... In Venezuela we risk everything...

Enclosed the letter that Congressman Ramos would have sent to Williams F1, but didn't because of pressure, threats, political reasons, or all of the above.
Dear Ms Williams,

I thank you for your prompt reply to my communication, with respect to the contract between PDVSA and the Williams F1 Team.

Your reply, however, suggests that William F1 has not done sufficient due diligence on Venezuela’s legislation regarding public expenditure.

As you know, PDVSA is an oil conglomerate, fully owned by the Venezuelan State. Given that PDVSA is the largest contributor of fiscal revenues to the Venezuelan State, its budget needs to be approved by its board and its sole shareholder - the State, on a yearly basis. The amount, and general expenditure, of PDVSA's budget is, as a matter of law, public matter. Ergo, Venezuela's Congress receives, once a year, a detailed account of PDVSA's expenditure, for one very important reason: monies earned by PDVSA in the course of its natural business operations belong to and support the State.

Sponsoring a F1 racing team is most definitely not a priority expenditure for an entity that can derive NO commercial benefit from such capricious outlay. Bear in mind that PDVSA is not a commercial brand, and that it sells nothing to consumers with its brand - now painted in various places on your race cars. The financial situation of the Williams Formula 1 team is probably a matter of great concern to its owners, employees, and commercial sponsors. However, there is no acceptable explanation as per why 28 million Venezuelans have to foot the bill, to simply help Williams survive. I understand why you would take money from anyone, though it is impossible for me to explain, to my constituents and countrymen, why on earth we are wasting money on your team. That all of this is done by a government that calls itself socialist, a government which has destroyed much of the private sector in my country, and has demonised the practices of capitalism, is even more ironic and perplexing.

Article 154 of Venezuela's Constitution: “Treaties agreed to by the Republic must be approved by the National Assembly prior to their ratification by the President of the Republic, with the exception of those which seek to perform or perfect pre-existing obligations of the Republic, apply principles expressly recognised by the Republic, perform ordinary acts in international relations or exercise powers expressly vested by law in the National Executive.”

Article 222 of Venezuela's Constitution: “The National Assembly shall be empowered to exercise its control function by means of the following mechanisms: parliamentary questions, investigations, questions, authorisations and parliament's approvals as provided for in this Constitution and by law, and any other mechanism that may be established by laws and their associated Regulations. In exercising parliamentary control, the National Assembly shall have the power to make a finding of political liability on the part of public officials and call on Citizen Power to initiate the appropriate action to enforce such liability.”

Article 223 of Venezuela's Constitution: “The Assembly or its Committees shall have the power to conduct such investigations as they may deem appropriate in matters within their competence, in accordance with the Regulations. All public officials are obligated, subject to the penalties established by law, to appear before such Committees and provide the same with any information and documents they may require in order to carry out their functions. Private citizens are also subject to this obligation, without prejudice to the rights and guarantees embodied in this Constitution.”

Article 314 of Venezuela's Constitution: "No expense of any kind shall be disbursed unless the same has been provided for in the budget law. Additional budget credit items may be ordered to cover essential unforeseen expenses or items that had not been adequately funded, only if the treasury has resources to cover the expenditure concerned; this shall be done only following a vote in favor by the Cabinet of Ministers and authorisation by the National Assembly, or in its absence, by the Delegated Committee."

The Venezuelan Congress was not informed, according to law, of the sponsorship contract between Williams F1 Team and PDVSA. Neither in 2010, nor in 2011, was the Venezuelan Congress informed by PDVSA of such expenditure within its budget. This is clearly our problem, as it further underlines the institutional collapse of our society. The loss of independence of the Legislative Branch, and the repeated violation of the law on the part of the Executive Branch, are the hallmarks of the so called “Bolivarian Revolution” you have so joyfully tied your team’s future to.

Therefore, I can not, and will not, accept your argument of confidentiality. What we would expect from any and all counter-parties to a public contract in Venezuela, is that they would seek, and demand, that all legal steps be cleared, and maximum transparency be ensured. Your failure to demand this from PDVSA, coupled with your unwillingness to facilitate the work of the National Assembly, makes Williams F1 Team complicit of unauthorised spending, and so from this moment on that is exactly they way I intend to treat Williams F1 Team, unless, of course, you change your absurd position and start collaborating.

Until proven otherwise, we will continue to have the suspicion that irregular payments are an integral part of this ruinous contract, as they have become the norm in almost all public contracts signed by the Chavez administration. Rest assured that the contract between Williams F1 Team and PDVSA will not remain confidential, we will not stop investigating this matter, and we will seek any and all means to terminate this contract. Equally, we will ensure that Venezuelan public monies no longer get wasted in such fickle and unproductive sponsorship.

To conclude, I would like to respectfully request that you reconsider your position and manner of replies, while I reiterate my request for: 1) a copy of the original contract; 2) monies disbursed to date by PDVSA; 3) evidence of payments to date by PDVSA; and I add 4) the names of all PDVSA or Venezuelan government officials that have obtained from, or through, Williams F1 Team, VIP treatment and box passes for races in the 2011 F1 season.

Alek Boyd created Vcrisis.com and started blogging about Venezuela in Oct. 2002. Since, he has worked as an independent researcher, reporter, lobbyist, civil and political rights activist, and has experience in strategic and media consulting throughout Latin America. In 2006, Alek became the first blogger ever to shadow a presidential candidate in Venezuela. In 2009 he gained a MA (merits) in Spanish American Studies (King's College London). Alek can be contracted to do due diligence on individuals and companies in Venezuela and LatAm. Contact: @alekboyd.

Most of the investigations I've published since 2002 are related to individuals and companies with suspect connections to Hugo Chavez's regime, whose actions would've gone unnoticed otherwise. Exposing the $2-trillion dictator is no easy task, and so donations are always welcome.